Its been a quiet night of dealing as currency traders close their books for the week, with EUR/USD seeing a slight bid in a Asian and early European session on mild optimism over progress in Russia and Ukraine talks and reassuring commentary from Brussels on Greece.

With geopolitical tensions calming in the Eurozone traders had a chance to focus on more prosaic economic data which showed a small upside surprise in both German and EZ GDP readings. German preliminary GDP printed markedly better at 0.7% vs. 0.3% eyed while EZ GDP improved slightly to 0.3% from 0.2%.

While hardly torrid, the GDP figures for the region show that growth may starting to accelerate as lower euro and lower energy prices provide a boost to both demand and supply. The key tell for the market will be the Flash PMI readings for the EZ due at the end of next week. If the data shows a pickup in activity – and there is good reason to believe that it will – the recovery in EUR/USD could be much stronger than the market thinks.

For now the pair is slowly churning its way towards the 1.1500 level, but if next week brings some kind of a resolution to the Greek crisis in conjunction with better economic data, the short covering squeeze in the EUR/USD could catch many late shorts flat footed and push the pair to 1.1700 level over the near term horizon.

As to the greenback some profit taking continues against the buck with USD/JPY dipping to 118.40 in Asian trade before bouncing back towards the 119.00 level. Today the calendar is quiet, but traders will focus on the U of M survey data which is expected to rise slightly from the month prior. Any upward surprise could provide a mild lift for the pair but for now it remains capped at the 120.00 level as markets await more data points to confirm the thesis that Fed will move towards normalization in the second half of the year.